Many people know very little about how Bitcoin actually works. While most people understand the principle of the “old school” dongle that traditional banks have used, they do not know how this applies to Bitcoin. The advisor can talk them through the process, as well as explain what their recovery seed is, how it works, and how they can keep it safe.
This involves your time, and depending on the frequency with which each customer wishes to withdraw Bitcoin, the rate at which you charge the customer will vary. Certain advisors might wish to offer exceptional customer service, or have clients that demand their Bitcoin in minutes rather than hours, so they may charge higher fees for this service. Some clients could be deemed as hodlers (they are holders for the long term) and if they decide to sell, they’d be happy for the Bitcoin to be transferred within 24 hours.
This is an additional service that can be offered by the advisor outside of the Bitcoin platform. Exchanges offer corporate accounts, and this facility could be used to buy or sell Bitcoin on behalf of the client if the client finds the concept of an exchange all too daunting or they do not have the time or inclination to do it themselves. This is the time that an advisor will be a custodian of the client’s Bitcoin as well as trading on behalf of the customer, so regulations might exist in the advisor’s jurisdiction, and this is up to each advisor to resolve. A way around the custodial issues mentioned above is if an advisor assists a client with setting up their own account on the local exchange, and they are responsible for transferring the Bitcoin to their wallet. In this instance, the advisor is not in control of the client’s Bitcoin at any time.
In the event of the client’s death, their Bitcoin will need to be distributed to the heirs. If the client has given access to their account and hardware device to any third party that can act on their behalf with their advisor, the advisor and BitDirect will need to execute a transaction to transfer the Bitcoin to the heirs. The approval for this process will only be executed once BitDirect has been serviced with all the required legal documentation from the executor of the estate, as well as confirmation from the advisor that the client is deceased. There are further confidential internal security checks that will be conducted by BitDirect. This process will involve the advisor’s time, which justifies fees being charged.
The advisor should institute multiple layers of verification that ensure they are dealing with the customer when a request for a new hardware device has been received. This may constitute a face-to-face meeting, video chat, verification through secure messaging apps like Telegram & Signal. The advisor might want to institute various technical security improvements on their systems to verify your identity. All of these are a cost to the advisor.
The advisor could be extremely knowledgeable about the Bitcoin space and provide a service to customers about market trends, regulation changes, and all things technical that the customer might want to discuss with the advisor. This could be done through email newsletters, blog posts, face-to-face or over the phone. People like a trusted source of information and not just generic information from the internet. This is a value-added service that the customer will be prepared to pay for.
The advisor could be in a position to understand the complete composition of a client’s financial portfolio, which involves a lot of analysis to determine the client’s ideal exposure to bitcoin. Time is spent analyzing the holistic makeup of each customer’s affairs. The advisor might want to decide to start taking their fees from the bitcoin portion of the portfolio rather than the fiat portion of the portfolio.
There could be various regulatory requirements that the advisor might be required to abide by, depending on the laws of the local jurisdiction. This often involves licenses, compliance staff, and reporting requirements, which all add to the cost of the overall service.
BitDirect has a roadmap of future services that advisors can perform to support their clients. These could include things like tax preparation and planning, succession planning, and insurance services. As the Bitcoin and cryptocurrency landscape continues to evolve, there will be new opportunities for advisors to provide value to their clients and justify their fees.